Govt Acknowledges Direct Selling Business–FDSA

Kolkata: In a major breakthrough for the Direct Selling industry in India, the Union Government acknowledged Direct Selling Industry by bringing Direct Selling into the ambit of the ‘Consumer Protection Bill, 2015’ and would soon be coming up with guidelines. Mr. Zakir Hussain, Director (Internal Trade), Department of Consumer Affairs, Government of India, participating in the ‘Mega Awareness Program’ organized by Federation of Direct Selling Association (FDSA) at Kolkata on August 27, at Birla Sabhagar revealed amidst thundering applause from a packed auditorium that an Inter Ministerial Committee has been formed in November, 2014 to look into the various concerns of the direct selling industry and to address them properly so as to protect the direct selling industry from unwanted hassles.

He said that the committee had already met thrice during the course of the year. The next meeting is likely to be held soon where, the guidelines will be discussed with all the stakeholders like FDSA, IDSA and all direct selling companies and take their feedback before finalization of the guidelines. He further infor med that the‘Consumer Protection Bill, 2015’ has been introduced in the Par liament in last session.

Dwelling deeply into the efforts by the Consumer Affairs Ministry, he said, “When we started off to look into Direct Selling industr y, there was lot of confusion. However, we understood that Direct Selling is actually doing good business and tried to identify the problems and address them in an adequate manner. Initially, neither Direct Selling nor Multilevel Marketing was mentioned in the Consumer Protection Act, but now this has been included in the Consumer Protection Bill, 2015 to safe guard the interest of consumers”.

Drawing attention to the KPMG report on Direct Selling industry that was recently submitted at a FICCI meeting, he said, “This revealed industry’s empowerment of women and would reduce unemployment in our country, This is an incredible industry”.
Congratulating FDSA for organizing the program, Mr. Bejon Kumar Misra, International Consumer Policy Expert& Founder, Consumer Online Foundation, said that it is more than 15 years since Direct Selling took off in India and still there is no legal face for the industry. “We need to take an oath today that we all would work legally and frame our own work rules. As consumers, we want prompt redressal of our grievances and hence, we need to reflect the same attitude towards our consumers”, he pointed out.

Emphasizing that the direct sellers have a commitment to the Company which they are representing and the Country, he suggested that the direct sellers should continuously ask themselves whether they have done business to the best interests of the person who is paying for the products. “You should also spend some time and resource for the benefit of the poor who are not as privileged as you are. Further, this is the only business which is driven by housewives and hence, you need to have women in the forefront”, he said.
“We are all consumers. It is our money. How can any one stop us from buying a product that we want from a direct seller” he asked.

Observing that the direct sellers are job creators and not the job seekers, he said that the Modi government should learn from the direct sellers on how to digitalize India. “It is true that we cannot work without the government. But it is also not necessary that we should do what the government wants us to do. It is equally necessary that we place our advantages and disadvantages before the government and draw their attention to address our problems”, he pointed out.

Dr. C N Gopinath Reddy, Retd. DG – AndhraPradesh Police, speaking on the occasion said that we have come a long way beginning from the bar ter system of earlier days to that of direct selling of the present days, which had become inevitable and a necessity. Recalling the olden days where a trader used to br ing clothes and other erchandise to the doorstep of the consumer and sell, he observed that ‘this is what direct selling is all about’. “There is nothing new about direct selling. It is a time tested method which is now being implemented in a better manner. The present system is not able to reach the masses. We do not have any other way but to adapt the system. We have about 12 crore direct selling distributors in the Country”, he said.

“The problems that the industry is facing now are only because there is no proper definition to Direct Selling in the government. The Prize Chits & Money Circulation (Banning) Act which is made to crush the bad elements is now being used on Direct Selling companies. It needs to be understood that Direct Selling is a business and no one can curtail the freedom of the citizen”, he observed.

Drawing the attention of the audience to Public Distr ibution System (PDS) that is being implemented in all the states, he said, “PDS is designed to reach the consumer. Direct Selling is nothing but a PDS. We need to realize that Direct Selling has become an inevitable necessity. The police are a state subject and Centre has no role in it. Hence, the State has to be made to understand and have guidelines for ever y state. The interpretation will be correct only when the definition of direct selling is proper”, he pointed out.

Mr. Rajiv Gupta, Vice President, FDSA, while explaining the milestones achieved by FDSA said, “Direct Selling can change the economy of India, provided it is distinguished from those misusing the direct selling platform. Our challenge today is that a layman gets carried away very easily by those who offer promises of high return on investment. We should educate them with regard to Direct Selling that only government is authorized to give promises; business has to give products. Direct Selling is all about sale-purchase not about investment. If anyone comes to you with assurances, please report to us. We should reject the proposals of high return promises, which no economy can support. We should work on products only. FDSA had set up self policing guidelines for a disciplined industry and it would be appropriate, if all direct selling companies could adapt the guidelines in their respective companies”.

He appealed everybody to support FDSA and their cause.

Mr. Surender Vats, President, Direct Selling Distributors Welfare Association (DSDWA), an arm of FDSA, while introducing DSDWA, said, “There is lot of confusion in the gover nment depar tments as to where direct selling actually fits into. I haven’t come across anybody so far who works more than a direct seller. Direct selling is an opportunity for all. No qualification is required. And it benefits the government too. Taxes are paid on every sale and TDS is paid on the commissions earned. The best part is that there is no chance for pushing duplicate products. The var ious training programs improve the skills of the direct seller and create huge employment”.

Projecting the statistics on employment, Mr. Vats said, “In India against a population of 1.21 billion only 39.8 per cent are employed, while in the US the population is 316 million and 64 per cent employed and in China the population is 1.35 billion and 74 per cent are employed”.